Carnival To Sell Airtours Stake
Shares in Britain's largest package tour operator Airtours Plc fell by as much as eight percent on Monday after Carnival Corp said it would sell its 25 percent stake in the company. The stake was worth around 358 million pounds ($514.8 million) at Friday's closing price of 292 pence.
Carnival said the strategic reasons for its minority stake in Airtours were "no longer compelling".
Airtours said it had agreed to release Carnival from the share lock-up agreement between them.
"On the basis that they wanted to pursue their strategy in cruising, we were happy to release them," group chief executive Tim Byrne said. Up to 123.3 million shares will be placed with international institutional investors, with the book expected to close on Thursday. Investment banks UBS Warburg and Deutsche Bank are acting as joint bookrunners.
Market sources on Monday said any competitor considering a bid for the stake would need to secure the agreement of chairman David Crossland, who is Airtours' third-largest shareholder, with a ten percent stake.
"He probably wouldn't sell his own shares at this price," said one fund manager with shares in Airtours.
However, he said there probably would be demand for the shares amongst institutional investors.
"The trading results look pretty good. People want to invest in companies that are close to the consumer," he said.
Airtours, which is the largest distributor of Carnival cruises in the U.S., said the commercial relationship between the two companies would survive.
"They depend on us to distribute their product, and we depend on them to give us their product to distribute, so that commercial relationship will continue very strongly," Byrne said. - (Reuters)